Small group schemes typically start at around two or three employees; the more favourable group underwriting is usually reserved for larger workforces.
How it actually works
Below a handful of people, cover is often arranged as individual policies rather than a group scheme. But many insurers will write a small-group scheme from around two or three lives upward, so even a very small business can have a proper scheme instead of separate personal policies for each person.
Size is what unlocks the attractive terms. Community rating, where the group is priced as a whole, and medical history disregarded, where existing conditions are covered without each member being individually underwritten, are usually offered only to larger groups — often from around ten or twenty lives up. Below that, members tend to be underwritten much like individuals.
The reason is risk spreading. A larger group behaves predictably, so an insurer can afford softer underwriting and steadier year-to-year pricing. A group of two or three behaves statistically like a few individuals, so the underwriting stays tighter and existing conditions are more likely to be excluded or declared.
Because the exact thresholds differ by insurer, a business sitting near a boundary can get materially different terms from one insurer to another. That is precisely the gap a broker is there to find, so it is worth having a small group rated across several insurers rather than assuming one answer applies everywhere.
Questions to put to the insurer or broker
- Will you write a scheme for just two or three people?
- What group size do I need for medical history to be disregarded?
- Which insurers write the smallest schemes on the best terms?
Related questions
- Can my limited company pay for my private health insurance?
- Health cash plan or private medical insurance for my staff — which is better?
- Can I get company private health insurance just for myself as a director?
- Do I have to offer private health insurance to all my employees?
Cover, tax and advice are three separate questions
This explains how business and group cover is structured, not what a scheme would cost you — that turns on your workforce, the cover level and the insurer. The tax treatment described is general and depends on your circumstances, so confirm it with an accountant, and use an FCA-authorised broker to arrange the scheme itself. Private medical insurance still excludes conditions an employee already has, and the chronic conditions every insurer excludes, whoever pays the premium.
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